Does Homeowners Insurance Cover Contractor Theft?

There’s no doubt about it – homeowners insurance is a vital part of protecting your home and your family. But what happens if you’re the victim of contractor theft? Does your homeowners insurance policy cover that? 

In this article, we’ll take a look at what is covered by homeowners insurance and what isn’t, and help you figure out whether or not you’re protected in the event of contractor theft. The short answer: it depends.

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When Is Contractor Theft Covered?

There are a few instances in which your homeowners insurance policy will cover contractor theft:

  • If the thief is an employee of the contractor: In this instance, your homeowners insurance policy would likely cover the theft, as the employee is considered to be working on behalf of the contractor.
  • If you can prove that the contractor was negligent in hiring the thief: In order to prove this, you would need to show that the contractor knew or should have known that the employee was a thief. This can be difficult to do, but if you have evidence that the contractor was aware of the employee’s criminal history, for example, it may be possible to make a case.
  • If the theft occurs during a home invasion: This is a bit of a grey area, as home invasions are typically not covered by homeowners insurance policies. However, if the home invasion can be proven to be the result of the contractor’s negligence (for example, if they left your front door unlocked), you may be able to make a case for coverage.

When Is Contractor Theft Not Covered?

There are also a few instances in which your homeowners insurance policy will not cover contractor theft:

  • If the thief is an independent contractor: In this instance, the theft would not be covered by your homeowners insurance, as the independent contractor is not considered to be working on behalf of the contractor.
  • If they didn’t do any work: If your contractor simply just stole from you without doing any work on your property, most homeowners insurance policies won’t pay out beyond a very small amount. This is why it’s so important to work with reputable people. 
  • If you cannot prove that the contractor was negligent in hiring the thief: As we mentioned before, this can be difficult to do. If you don’t have evidence that the contractor knew or should have known that the employee was a thief, it’s unlikely that your homeowners insurance policy will cover the theft.

Other Things to Be Aware Of

There are a few other things you should keep in mind when it comes to contractor theft and homeowners insurance:

Most policies have a deductible: This means that you will be responsible for paying the first $500 (or more, depending on your policy’s deductible amount) of any damages. So even if your homeowners insurance does cover the theft, you’ll still have to pay out of pocket for at least part of the damages.

Your policy may have limits on coverage: Many homeowners insurance policies have limits on how much they will pay out for any one incident. So even if your theft is covered, you may only receive a portion of the total value of the stolen goods.

You may need to purchase additional coverage: If you’re concerned about contractor theft, you may want to consider purchasing an endorsement or rider to your homeowners insurance policy that specifically covers contractor theft. This will typically cost an additional premium, but it may be worth it for the peace of mind.

Conclusion

As you can see, whether or not your homeowners insurance policy will cover contractor theft depends on a number of factors. If you’re ever in doubt, it’s always best to contact your insurance company and ask them directly. Also, bringing the police involved can be beneficial. In the meantime, be sure to take precautions to protect your home and your belongings, such as keeping valuables locked away and being aware of who is coming in and out of your home during a renovation.

Do you have more questions about homeowners insurance? Leave us a comment below or contact us today! We’re always happy to help. Looking for more articles like this? Check out our blog for more great tips and information.

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